Annual Report2019

Let me begin by expressing how honored and humbled I am to have been selected as Jax Federal Credit Union’s President and Chief Executive Officer. As a long-time resident of the Jacksonville area, I’m genuinely excited to be part of JAXFCU and to lead our efforts to continue making a difference in the communities we serve.

JAXFCU is an excellent company that is financially stable and has been serving its’ members in Northeast Florida since 1935. Over the last 6-months, we’ve seen tremendous success with continued membership, loan, and deposit growth further strengthening our financial performance and ability to serve our members. Some of the key areas to highlight include:

• Membership Growth remains strong, and we’re now serving 36,867 members.

• Net Promoter Score (used for gauging the member’s overall satisfaction) exceeded record levels at 91.9 out of 100.

• Disbursements for purchase and refinance mortgage loans are breaking new levels month after month.

• Acquired a new branch location on Baymeadows.

These are exciting times for the credit union, our members, and the associates! It’s important to note that all our efforts and actions are aimed at making sure we are serving our members and continuing to bring credit union services to people throughout our entire field of membership.

To achieve these objectives, we’re focusing on four areas that will allow JAXFCU to continue to grow, remain financially stable, and make a difference in peoples’ lives. These focus areas are:

• Elevate the Brand – Elevate the brand so that it becomes a household name across Northeast Florida. The more people and communities that know about how JAXFCU can assist them, the more peoples’ lives we can make a difference in.

• Inspire Employees – Our Associates care about the members we serve; there’s no question about that. If we can inspire the employees around us to do even greater things, then we can have a more positive impact on how we serve our members every day.

PRESIDENT’S MESSAGE

JOE NOWLANDPresident and CEO

OUR VISION

To become our members’ first choice through advoca-cy, innovation, and service.

OUR MISSION

Jax Federal Credit Union exists to encourage the financial success of our membership.

OUR VALUE PROPOSITION

We take the hassle out of financial services. We make it easy for our members.

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CHARLES T. MCLEOD2019 Chairman

JAXFCU EXECUTIVE TEAM

JOE NOWLAND President and CEO

MARY SVOBODAChief Operating Officer& Chief Lending Officer

TAMARA BYRDChief Financial Officer

ANGIE COLEMANChief Marketing Officer

MANISH KOTHARIChief Information Systems Officer

ADAM MCGOWANVP of Retail Operations & Sales

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• Accelerate Growth – By accelerating growth, we can improve efficiencies, increase net income, and strengthen the organiza-tion. This will allow us to offer more products and services, add additional access points with branches and ATMs, and continue providing competitive loan and deposit rates.

• Digitally Transform the Company – Continue to evolve and advance our digital and online delivery and servicing platforms allowing for a user-friendly experience at all points of access. More importantly, though, we want our members to be able to do business how, when, and where they want. That should be their choice.

I want to close by saying “thank you” to all our member-owners. Without your support and membership, we would not have been able to able to provide the financial support to Northeast Florida that we have over the last 84-years! Thank you for your membership, and thank you for trusting us to help you meet your financial needs.

Joe W. Nowland President/CEO

MESSAGE FROM THE CHAIRMANAs many of you know, in March of this year, we selected Joe Nowland as our fifth President and CEO of Jax Federal Credit Union. We conducted a nationwide search to replace our previ-ous President that retired, only to realize that Joe resided right here in the Jacksonville area for the last 11 years. His extensive banking and credit union credentials. We are excited to have Joe leading our credit union.

It would not surprise me if you have already met Joe at a branch, a credit union softball game, the shred day at the Park Street branch, a chamber event, the Clay Florida Economic Develop-ment Corporation, or the Clara White Mission. He has also been very active, providing financial wellness tips on local news out-lets: radio, television, print, online, and social media. We can tell Joe is committed to JAXFCU and making a difference for our members.

Charles McLeod, Chairman of the Board

STATEMENT oF FINANCIAL CONDITION

ASSETSAs of

June 30, 2019As of

June 30, 2018

Cash $4,633,466 $4,659,588

Investments:

Available for Sale $19,045,849 $27,717,133

Other $48,129,277 $48,382,418

Loans to members, net of allowance for loan losses $307,991,980 $290,742,192

Other Receivables $10,348,466 $7,747,956

Accrued Interest receivable:

Investments $140,074 $157,832

Loans $749,347 $679,785

Prepaid and Other Assets $2,660,826 $2,875,212

Property and Equipment, net $7,061,542 $7,469,851

NCUSIF deposit $3,250,851 $3,297,633

Total Assets $404,011,678 $393,729,600

LIABILITIES

Member's share and savings accounts $346,400,451 $342,837,105

Accounts Payable $5,397,097 $3,975,442

Interest Payable $165,427 $95,817

Borrowed Funds $6,142,857 $3,500,000

Other Accrued Liabilities $889,672 $898,432

Total Liabilities $358,995,504 $351,306,795

MEMBERS’ EQUITY

Regular Reserve $9,193,682 $9,193,682

Undivided Earnings $35,815,116 $33,551,473

Accumulated other comprehensive income $7,376 $(322,350)

Total Members’ Equity $45,016,174 $42,422,805

Total Liabilities and Members’ Equity $404,011,678 $393,729,600

+2.6%Increase in

Total Assets

+6%Increase in

Loans to Members

+6.1%Increase in

Member’s Equity

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On behalf of Jax Federal’s Board of Directors, I am pleased to share the Annual Treasurer’s Report with the JAXFCU membership. 2018 was a good year for our credit union. Over the twelve months ending June 30, 2019, loans to members increased by over 10% to $14.4 million and member’s equity increased by 6% to $45 million. Finally, the five-year trend for Net Worth, Loans, Deposits, and Assets are positive, showing consistent year-over-year improvement.

We anticipate challenges ahead due to the general economic uncertainties with the interest rate environment and competitive pressures which we are tackling head-on in our strategic planning.

Patrick O’Neill, Treasurer

PATRICK O’NEILLSecretary/Treasurer

TREASURER’S MESSAGE

STATEMENT oF INCOME

INTEREST INCOMEAs of

June 30, 2019As of

June 30, 2018

Loans to Members $14,381,959 $13,027,892

Investments $1,434,022 $1,114,377

Total Interest Income $15,815,981 $14,142,269

INTEREST EXPENSE

Total Interest Expense $1,857,305 $1,155,234

Net Interest Income $13,958,676 $12,987,035

Provision for Loan Losses $1,824,672 $1,181,292

Net Interest Income after Provision for Loan Losses $12,134,004 $11,805,743

NON-INTEREST INCOME

Fees and service charges $2,159,550 $2,012,209

Miscellaneous Operating Income $3,373,006 $3,679,231

Total Non-Interest Income $5,532,556 $5,691,440

$17,666,560 $17,497,183

NON-INTEREST EXPENSECompensation and Employee Benefits $7,969,764 $7,314,982

Office Operating Cost $2,959,144 $3,027,043

Other Expenses $4,474,009 $4,178,783

Total Non-Interest Expense $15,402,917 $14,520,808

Net Income $2,263,643 $2,976,375

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Joseph W. SharpBoard Member

Charles T. McLeodChairman

2019 BOARD oF DIRECTORS

COMMUNITY INVOLVEMENT

2019 BOARD oF DIRECTORS

C. Eugene WorthBoard Member

Bruce DickinsonBoard Member

Christine ConnerVice Chairman

Patrick O’NeillSecretary/Treasurer

Mary JonesBoard Member

AWARDS & RECOGNITION

The Jacksonville Busi-ness Journal recognized

two members of our Executive Team in 2019. Our congratulations to:

Angie Coleman2019 Women of Influence

Honoree

Manish Kothari2019 Technology Leader of

the Year Honoree

Jax Federal Credit Union was recognized for the third year in row with the America Saves Designation of Savings

Excellence. America Saves Week was held February 25 through

March 2, 2019.

JAXFCU was one of only seven credit unions recognized among the

350 financial institutions that participated in Amer-ica Saves Week, and the

only recipient head-quartered in Northeast

Florida.

REVAMPED ACCOUNTS

Extreme Checking got more extreme with easier access to earning higher

dividends.

No Closing Costs Mortgages are helping

more JAXFCU members become homeowners.

Save a little more. No fees for members using coin counting machines

in our branches.

Directors EmeritusErnest Webster

Joyce Barnes

Jimmy Hicks

Scott Preacher

Donald W. Bottin

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We were beyond delighted and honored to be named one of Jacksonville Magazine’s Companies with Heart in 2018 earlier this year. Our JAXFCU associates generously volunteer so much time to the community events we participate in every year, and our members are generous with their support.

ANNUAL SCHOLARSHIP

We’re excited to announce our Scholarship winners for 2019. This year was extra special with our new CEO and President, Joe, opening the contest to five winners, encouraging applicants from Baker, Clay, Duval, Nassau & St. John’s counties.

Meet our 2019 Winners!

Bailey Bowen, Ke’Yondra Merritt, Jourdan Funderburk, Emma Brinson, and Kaitlynne Parrish

Congratulations on your educational achievements. We cannot wait to see what your future holds!

JAXFCU Volunteers

83

251.5Hours Volunteered

$3,237.05Services Donated

Figures are for 2018

$19,260Total $$$ Donated

SUPERVISORY COMMITTEE MESSAGE

Jax Federal Credit Union’s (JAXFCU) Supervisory Committee is made up of volunteer members who independently evaluate the strength as well as the safety and soundness of JAXFCU’s operations and activities.

The Committee’s primary emphasis is to ensure the following:

• An independent audit is performed annually;

• Account balances of the membership are verified;

• Adequate policies and procedures exist and are complied with to protect the credit union’s resources;

• Governing regulations are properly adhered to; and

• The financial statements accurately reflect JAXFCU’s results of operation.

The Supervisory Committee collaborates with the Director of Internal Audit, the Board of Directors, the President & CEO, and employees of JAXFCU to ensure that the credit union’s assets are safeguarded by upholding policies, procedures, and regulatory requirements. The Supervisory Committee retained the services of Ewart & Associates, CPAs, to perform an audit of JAXFCU’s financial statements. Ewart & Associate’s annual audit of JAXFCU’s financial statements ensures that they represent fairly, in all material respects, the financial position and results of operations of Jax Federal Credit Union in conformity with U.S. Generally Accepted Accounting Principles. The Supervisory Committee has again determined that Jax Federal Credit Union is a strong financial institution. We thank the Board of Directors, management, and staff for their cooperation and commitment to sound financial practices.

Ed Teller, Supervisory Committee Chairman

The Supervisory Committee welcomes your suggestions, comments, or concerns, and may be contacted by U.S. Mail or by e-mail at the following addresses:

Supervisory Committeec/o Jax Federal Credit UnionP.O. Box 551321Jacksonville, Florida 32255-1321supervisory@jaxfcu.org

Ed TellerChairman

Dan LonghiMember

Joe PutzSecretary

Sylvia LudwigMember

Joan KaneMember

2019 SUPERVISORY CoMMITTEE

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FEDERALLY INSURED BY THE NCUAWe do business in accordance with the Federal Fair Housing

Law and The Equal Credit Opportunity Act.

904-475-8000www.jaxfcu.org

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Visit www.jaxfcu.org for maps, our ATM locator tool, and shared branching locations!